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Product characteristics and the growth of FDI


  • Frank Barry
  • Aoife Hannan


FDI and the activities of foreign affiliate firms have grown dramatically in recent decades, both in absolute terms and as a share of world GDP. Most explanations of this phenomenon focus on the impact of the macroeconomic environment on the choices facing individual firms over whether or not to engage in FDI. We focus instead on the characteristics of demand for the products produced in sectors known to be conducive to FDI. These characteristics are shown to help explain the recent growth in the FDI-to-GDP ratio.

Suggested Citation

  • Frank Barry & Aoife Hannan, 2003. "Product characteristics and the growth of FDI," Working Papers 200308, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:200308

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    References listed on IDEAS

    1. Neary, J Peter, 2002. "Foreign Direct Investment and the Single Market," Manchester School, University of Manchester, vol. 70(3), pages 291-314, June.
    2. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
    3. Braconier, Henrik & Ekholm, Karolina, 2001. "Foreign Direct Investment in Central and Eastern Europe: Employment Effects in the EU," CEPR Discussion Papers 3052, C.E.P.R. Discussion Papers.
    4. James R. Markusen, 1998. "Multinational Firms, Location and Trade," The World Economy, Wiley Blackwell, vol. 21(6), pages 733-756, August.
    5. Stephen Pavelin & Frank Barry, 2005. "The Single Market and the Geographical Diversification of Leading Firms in the EU," The Economic and Social Review, Economic and Social Studies, vol. 36(1), pages 1-17.
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    Cited by:

    1. Frank Barry & Adele Bergin, 2010. "Ireland’s Inward FDI over the Recession and Beyond," The Institute for International Integration Studies Discussion Paper Series iiisdp321, IIIS.

    More about this item


    Foreign direct investment; Investments; Foreign; Gross domestic product; Industrial location; Industrial organization;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business


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